Problem
Virginia Communication Co. was established in 2021. At the beginning of 2022, Virginia Communication Co. showed the following information on its partial balance sheet:
Common stock, $1 par; authorized, 1 million shares;
issued and outstanding, 300,000 shares $300,000
Paid-in capital-excess of par $1,500,000
Paid-in capital-shares repurchase $90,000
Retained earnings $1,880,000
Virginia Communication Co. had the following transactions and events between 2022 and 2024.
Task
A. On January 3, 2022, Virginia Communication Co. issued 8%, $5 par, 40,000 shares of cumulative preferred stock for $400,000. Prepare the related journal entry.
B. On August 24, 2022, Virginia Communication Co. repurchased and retired 50,000 shares of common stock. On that date, the market price of its stock was $11 per share. Prepare the related journal entry.
C. On November 7, 2022, Virginia Communication Co. reissued 30,000 shares of common stock which were required at transaction b for $15 per share. Prepare the related journal entry.
D. Virginia Communication Co. owns 80,000 shares of the preferred stock of North Carolina Company as investment. Virginia Communication Co. decided to divest itself of this investment by distributing the shares of North Carolina Company in the form of a property dividend. The dividend ratio is one share of North Carolina Company for every seven shares of Virginia Communication Co.'s common stock held by shareholders. Before this transaction d, Virginia Communication Co. has 280,000 common shares outstanding (300,000 shares outstanding at the beginning of 2022 minus 50,00 shares of repurchase in transaction b and plus 30,000 shares of resale in transaction c). On January 11, 2023, the date of declaration, North Carolina Company's preferred stock had a par of $5 per share, a book value of $8 per share, and a fair value of $10 per share. The North Carolina Company's shares were payable to shareholders of record January 31 and to be distributed on February 6. Prepare related journal entries on January 11, 2023, January 31, 2023, and February 6, 2023.
E. On May 21, 2023, Virginia Communication Co. declared and distributed a 10% common stock dividends. On that date, the market price of its stock was $16 per share. Prepare the related journal entry.
F. On July 17, 2023, Virginia Communication Co. declared a 4-for-1 stock split effected in the form of 300% stock dividends. On that date, the market price of its stock was $17 per share. Prepare the related journal entry.
G. On September 30, 2023, Virginia Communication Co. declared a 3-for-2 stock split and did NOT treat the split effected in the form of large stock dividends. On that date, the market price of its stock was $17.5 per share. Prepare the related journal entry.
H. In 2022, Virginia Communication Co. declared and distributed $10,000 cash dividends. In 2023, Virginia Communication Co. declared and distributed $25,000 cash dividends. Calculate the cash dividends paid to common shareholders and preferred shareholder in 2024. Show your calculation process in a simple way.